The question of automation vs personalisation for a company is all about saving time and money whilst increasing efficiency. Whereas the perspective of the customer is about receiving good customer service and feeling valued. So the question is “What does your business value more? – Costs or Customers?”

Advantages and Disadvantages

I’d pick personalisation over automation every time, but as a business grows they must consider all options on how to communicate effectively with their customers. Here’s some of the advantages and disadvantages of automation and personalisation:

Automation benefits:

Cost reduction

Saves time

Reaches a high volume of customers

Automation negatives:

Error prone

No human contact

No personalisation

Just another number

Personalisation benefits:

Customer service

Individual attention

Deliver bespoke products/services

Increases chances of repeat business

Personalisation negatives:

Time consuming

Costly to scale

Automation vs Personalisation is simply the choice between quantity over quality. I always like to place myself in the shoes of the customer – what type of service do they expect? Customers are individuals and expect to be treated accordingly, how special do you feel knowing you’re just another number receiving generic marketing communications?

Small Business vs Big Business

How can big businesses connect with a vast volume of customers without using automation? – More often than not, they simply can’t. Can you imagine the amount of money, time & employees that would be needed for a company with thousands/millions of customers to connect on a 1:2:1 basis? But that’s acceptable, as long as time and money are being saved – the customer is last on the list of priorities.

Small businesses on the other hand don’t have the resources to connect with a high volume of customers, personalisation is necessary. Let’s take email software as an example, rather than sending 1,000 generic emails with a 1-2% response rate, try studying 10 customers and sending personalised emails with bespoke offerings relating to those individual/business needs. Guaranteed your ROI improves, your responses will increase and you’ll develop a reputation for being a customer-centric business. If more small businesses take the time to connect with each individual customer, rather than applying a mass-market approach, then this can be used as a distinct competitive advantage.

Achieving economies of scale isn’t the holy grail of business, growth must be accomplished over a longer period of time, growing too big too fast can and will destroy many businesses. Focus on what you have now, your strengths, your weaknesses and most importantly your customers. By being a customer-centric business you can personalise almost all Marketing communications which results in customer retention, recommendations and an increase in overall customer value. Perhaps customers of larger companies wouldn’t be so keen to move to competitors if they feel valued – personalisation over automation every time. 🙂

Who exactly is your customer? This is one question many small businesses struggle to answer. What age are they? Where do they come from? What are their characteristics & lifestyles? These are all fairly easy questions to answer, if you have a database.

The Importance of a Database

When someone enquires about your products/services via email, Facebook, your website or any other channel you’ll naturally respond to those people using the channel they made the enquiry from. You’re correct to respond to your customers using the channel they use, but it’s also important to collect as much information as possible about each individual person or company. If they phone you then ask for their email address, if they email you ask for their Facebook profiles. If you want to know who your customers are, then you must collect as much relevant details as possible so you can begin to understand exactly who your target market is. When I see an advert with only a phone number, it’s dead. Unless I need to call that company immediately their potential to sell to me has been lost. If that advert had a Facebook page, a website or email address then I can make an enquiry in my own time.

Database Benefits

The importance of capturing as much information as possible about your customers is essential to ensure future marketing activities are more relevant to the people who’re receiving them. With a richly populated database you will be able to understand:

Measuring the effectiveness & ROI of your marketing efforts cannot be achieved unless you capture, store and utilise the information from your database. There’s no point in having details about your customers in a range of locations like a diary, email list, pieces of paper and social media accounts. Your customer details must be in one place so they’re easily accessible for speed and accuracy with the ability to collate and measure that data. From here you can target smaller segments of customers based on a range of variables and tailor marketing communications to those smaller more unique groups of people. See – Why Small Is Good in Segmentation.

What Database?

What database do I use? Good question to ask. There are a multitude of database options available for small businesses and using Microsoft Excel or Access is a good place to start. Once your database and company begins to grow then you might consider upgrading to paying for CRM (Customer Relationship Management) systems which will incorporate all your back office processes. CRM systems are advantageous over the likes of Excel & Access with superior capabilities, but it would be advisable to use simple free databases in the early stages of your business and reconsider your database options as you experience growth.

Don’t underestimate the importance and power of the database to your business, because from here you will truly be able to understand exactly who your customers are and how to reach them.

Every business starts off small, some stagnate, some grow moderately and some grow into the multi-nationals that we’re all familiar with today. Obvious benefits arise as a result of being a large business such as a high volume of customers, increased capital, brand awareness and achieving economies of scale. However being a big business doesn’t make you the best in the business, it simply makes you big. The Department for Trade & Industry in the UK define a large business as having more than 250 employees and a turnover of greater than £11.2 million.

Now I must begin by stating that not all big businesses are bad, but I firmly believe that most of them result in more negative than positive factors and here’s why:

Shareholders

Big companies too often prioritise shareholders as the most important stakeholder by striving to generate increased year on year profits aimed at distributing dividend payments. With CEO’s and Directors all receiving a vast portion of their remuneration packages in shares, shareholders form an elite club as the most important stakeholders in a business. It should always be the customer!

Greed

An unhealthy focus on shareholder satisfaction is one example of greed, but there are countless examples of greed – banks, no further explanation required here! The bonus culture is crass, think about how useful that money could be to employees, customers, product development and securing a company’s future. Lord Sugar is a famous advocate for large remuneration and bonus packages insisting that it’s necessary to attract the top global talent. If a Director is willing to accept tens of millions in bonuses then are they really the right people to have at the top? Is such a grossly huge salary best for customers and employees? Opportunity cost doesn’t enter the equation here. John Lewis offer £500,000 as their top salary and more companies should follow their exemplary lead.

Homogenisation

I own an i-Phone, I love it but I’m not unique and don’t stand out. Walk down any high street in any town or village and you’ll see the same shops, people wearing the same clothes all communicating on the same types of phones. We now live in a homogenised world with homogenised goods and services and that’s not healthy for the consumer or for free market competition. Customer service also becomes homogenised, how many times have you spoken to a call centre with people programmed to ask the same questions in the same tone all day every day? Now consistency is important to maintain quality standards, but as a customer I know I’m just a number on a database who must be rushed off the phone as quickly as possible to satisfy call handling times. Even employees are becoming homogenised, programmed to think “the company way”.

Company structure

How flexible can a big business really be? How do they respond to changes in consumer demand and market forces? A decision from Director/Managerial level cannot effectively be distributed across numerous countries, departments and cultures. The time taken in a big business to respond to market changes simply cannot occur immediately and the very nature of being large ensures that inflexibility is a major flaw of the big firms.

Achieving a higher volume of customers comes at the expense of the quality time a big company can dedicate to each individual customer. Striving to achieve economies of scale often results in diseconomies of scale, with a failure to understand cultures and scalability. Money breeds greed and greed breeds failure all because you want to be big. Being a big business is over-rated, there’s nothing wrong with being small because – Small Is Good.